LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 684

STATE OF NEW JERSEY

222nd LEGISLATURE

 

DATED: AUGUST 7, 2026

 

 

SUMMARY

 

Synopsis:

Establishes thermal energy network pilot program for gas public utilities.

Type of Impact:

State and local expenditure increases over four years.

Agencies Affected:

Board of Public Utilities; certain State entities, local governments, and school districts.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Year One through Year Four

 

State Expenditure Increase

Indeterminate

 

Local Expenditure Increase

Indeterminate

 

 

·         The Office of Legislative Services (OLS) finds that the bill would result in a four-year indeterminate increase in State administrative expenditures by the Board of Public Utilities to establish, oversee, and evaluate the thermal energy network pilot program for gas public utilities.  The magnitude of the increase will depend on the number, size, and complexity of gas public utility project filings submitted to the board and the extent to which existing board staff and resources are sufficient to implement the bill.

 

·         The bill is not expected to directly increase State or local revenues or expenditures for construction or operation of approved thermal energy network projects.

 

·         The bill authorizes gas public utilities to recover the costs of approved pilot projects through gas public utility rates charged to ratepayers.  Accordingly, project costs would generally be borne by participating utilities and ratepayers, subject to board review and approval.

 

·         State entities, local government units, and school districts will realize an increase in indirect costs because each government unit is also a utility ratepayer.  Other residential, industrial, and commercial utility customers who make up the majority of the rate base would proportionately be charged the remaining amount that would be needed to implement the pilot program.

BILL DESCRIPTION

 

      This bill requires the Board of Public Utilities to establish a four-year pilot program to authorize gas public utilities to recover the cost of one or more thermal energy network projects, which would establish thermal energy network infrastructure in lieu of existing or new natural gas infrastructure for new or existing developments, particularly in areas with aging or leaking natural gas pipelines or without existing natural gas infrastructure, through the gas public utility rates charged to ratepayers.  The bill authorizes the board to locate a maximum of one project in each of the northern, central, southern, and coastal regions of the State.

      A gas public utility seeking to participate in the pilot program is required to submit a thermal infrastructure plan to the board.  The board may approve, deny, request modifications to, or partially approve and partially deny a submitted plan based on certain criteria outlined in the bill.

      Under the bill, no later than six months after the expiration of the pilot program, the board is required to: publish and submit a report to the Governor and Legislature detailing the implementation and results of the pilot program; and determine whether to extend the pilot program or convert the pilot program into a permanent program.

 

 

FISCAL ANALYSIS

 

 

EXECUTIVE BRANCH

 

      None received. 

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that the bill would result in a four-year indeterminate increase in State administrative expenditures by the Board of Public Utilities to establish, oversee, and evaluate a four-year thermal energy network pilot program for gas public utilities.  The magnitude of the increase will depend on the number, size, and complexity of gas public utility project filings submitted to the board and the extent to which existing board staff and resources are sufficient to implement the bill.

      The bill is not expected to directly increase State or local revenues or expenditures for construction or operation of approved thermal energy network projects.  Instead, the bill authorizes gas public utilities to recover the costs of approved pilot projects through the gas public utility rates charged to ratepayers.  Accordingly, project costs would generally be borne by participating gas public utilities and ratepayers, subject to board review and approval.

      State entities, local government units, and school districts will realize an increase in indirect costs because each government unit is also a utility ratepayer.  Other residential, industrial, and commercial utility customers who make up the majority of the rate base would proportionately be charged the remaining amount that would be needed to implement the pilot program.

 

 

Section:

Authorities, Utilities, Transportation and Communications

Analyst:

Michael D. Walker

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).